The lawsuit, which S&P said Monday that it expected, could revive scrutiny of a business model in which the people who are issuing bonds pay ratings agencies for a rating. The post-crisis criticism of S&P, and rivals Moody's Investor Service and Fitch Ratings, was that they bent over backwards to give AAA or other investment-grade ratings to shoddy securities in order to rack up the fees.

The 2010 Dodd-Frank act that was passed to toughen regulation of the financial industry didn't change that model.

When Dodd-Frank was being debated, Congress refused to adopt an amendment by Sen. Al Franken, D-Minn., that would have created an independent body, such as a self-regulatory organization, that would assign different securities to different agencies for ratings. Instead, the final bill called for the Securities and Exchange Commission to issue a study on how to reform ratings agencies.

The SEC released its first take on such a study just before Christmas -- without even a press release, said Dennis Kelleher, a corporate lawyer turned consumer advocate who's president of Better Markets, a non-profit lobbying for financial reform. And the staff study doesn't take a stand on whether to scrap issuer-pays.

"It leaves SEC regulation of the agencies in the same limbo it has been,'' Kelleher said.

The threat posed by a federal lawsuit against S&P could force the ratings agencies into changing their models in ways Congress didn't.

Or so Kelleher says.

Or things may turn out the way that S&P suggests in a statement attacking Justice's action - that Justice has a tough time proving anything like fraud, because all the major ratings agencies failed to discover how vulnerable the highly leveraged mortgage market was to even a small decline in house prices, let alone the 30% average drop that happened after 2006.